Posted
by
Soulskill
on Friday November 15, 2013 @02:30PM
from the everybody's-an-above-average-driver dept.

Hugh Pickens DOT Com writes "Kim Gittleson reports at BBC that car insurance firms like Progressive are trying to convince consumers that letting them monitor their driving behavior is actually a good thing. They say that the future of car insurance is not just being able to monitor individual drivers to give them lower prices, but also to make them better drivers. 'Now that we can observe directly how people drive, we think this will change the way insurance works,' says Dave Pratt, who says that Progressive has more than a trillion seconds of driving data from 1.6 million customers. '18-year-old guys pay a lot for insurance, but some 18-year-olds are really safe drivers and they deserve a better deal.' Better big data technologies, like the telematic driving data collected by car companies (PDF) or even information gathered from social media profiles, can help augment that risk profile. 'If I'm a driver that doesn't drive that frequently, and I have a pattern that would indicate that I drive more carefully than an average person with my profile, then I may be able to save 30-40% on my car insurance, and that's pretty significant,' says Joe Reifel. For now, using big data analytics for insurers is still in the early stages. Only 2% of the U.S. car insurance market offers an insurance product based on monitoring driving, but that proportion is projected to grow to around 10-15% of the market by 2017. And other countries, like Italy and the U.K., are already using the data to analyze not just risk profiles but also to determine who is at fault in car accidents. The future, most analysts agree is create a continuous feedback loop between insurers and consumers, so that consumers will react to the big data analyses that insurers perform and change their behavior accordingly. 'Bad drivers will at some point need to improve their driving or accept [having] to pay for the real risk they represent,' says Jacques Amselem."

You can't make high-risk populations pay the whole bill for their risk. That's not how insurance works.

In the case of driving you could say: "well then they can drive better". But that doesn't cover all the risk, whether you're too young, too old, or have a pet/kid/alcohol/disease distracting you this morning.

The wife and I currently use Progressive and we did their little driver-monitoring program a year or so ago. Our vehicles were only monitored for a couple months.

We ended up saving some money (Progressive was already lower than all the competition we had scoped out, but the program made it even a little lower).

Of note were the reasons given:

1. The devices were able to confirm our relatively low miles-driven.2. The devices found that we drove during "safe" times of day (if I remember right, it's the wee hours of the morning that are the "unsafe" times, probably due to increased rates of drunk driving).3. My wife saved a little more than me, due to my slightly higher incidences of "rapid stops." Apparently I should've punched through those yellow lights to save time AND money.

By identifying the high risk teenaged drivers we can target them with additional training and restrictions that will reshape their driving behavior and make them lower risk. And we could mandate that the insurance companies pay for some of that additional training.

This would similar to health insurance companies being mandated to cover preventative health services.

I think you nailed it succinctly there. While it's a popular idea that responsible customer A should not have to pay for irresponsible customer B, and certainly it is good to encourage less risky behavior, insurance is supposed to work as a protection against risk. The finer the analysis done to create these micro-pools, the more likely it is that instead of being insured for a risk, you get blamed for it instead, even in cases where it really isn't your fault.

Example: you're driving on the highway and encounter a dangerous situation for which the safest solution is to speed up way past the speed limit -- e.g. you are beside a the first of a tandem trailer, the truck driver doesn't see you, and he starts to change into your lane. So you do, and you may get on "Flo"'s shit list for it, or not, depending on how some coder tuned some Kalman filter or whatnot.

This is the same weird logic used in health care insurance, which also wants to charge more or less based on individual risk. So if we follow their logic...

They increase their accuracy in predicting who will be in an accident and change them more.

They increase their accuracy in detecting good drivers and charge them less.

Extrapolating this out, they eventually end up charging each individual exactly what it will cost the insurance company to pay each individual's claims plus their profit margin. At that point, the insurance company is a useless middle man and everyone may as well be self-insured.

but the simple statistical fact is that people who habitually exceed the speed limit by a considerable margin do have more accidents.

Cite please.

This says that driving faster absolutely increases the odds of an accident. The faster you are going the less time you can react, this is intuitively true and no one disputes this. If we all drove 10mph, there would be fewer accidents, virtually nobody would be injured in them when they occur.

And that speed differences between drivers leads to more accidents. In other words, overtaking is dangerous, and lane changes are dangerous. Again, I don't think there is any disagreement here.

Although changes in vehicle speeds were small, driver violations of the speed limits increased when the posted speed limits were lowered. Conversely, violations decreased when limits were raised. This does not reflect a change in driver behavior, but a change in how compliance is measured, i.e., from the posted speed limit.

Read that again, they raised and lowered the speed limits in places, and found that drivers for the most part did not change their speed by very much (although did record that it went up slightly when the limits went up and down slightly when speed limits went down). But primarily there were simply more people speeding when they lowered them, and fewer people speeding when they raised them.

Accident rates were not affected.

Thus there are plenty of indications that driving too fast for the conditions (just excessively fast, or significantly faster (or slower) than the cars around you) is dangerous and leads to more accidents.

However it strongly refutes the idea that exceeding the posted speed limit is itself a significant predictor of accidents. As you can lower the speed limit 10mph, and suddenly a lot of people are speeding, and the accident rate doesn't move.

So, I'm cruising along the highway at normal/safe/legal highway speeds. There's an on-ramp just ahead, with a car about to merge onto the high-speed roadway.

The merging driver should be going the full speed of the roadway. But he isn't. Because he's not actually a good driver. Instead, he's still travelling at on-ramp speed -- 20% below the highway limit, not at merging speed.

The safest thing for me to do is to accellerate much faster to get past the merge area before he gets to it. I have the room in-front of me, not behind me. The surface is safe, the visibility is safe, my car is safe and capable, and I'm very alert. So I accellerate to 30% over the limit for the 4 seconds it'll take.

You show me the insurance company that notices my excessive speeding as the safe driver and the slower merging car as the unsafe driver. I sped, to a speed that on paper is dangerous, illegal, and inappropriate. I just avoided a potential high-speed collision -- likely between the merging car and a third car behind me who couldn't see anything.

Had police unwittingly pulled me over, I'd have appeared before a judge, plead "guilty with a reason", and the judge would have agreed. Meanwhile, my insurance company would have done what, exactly? Would they have even asked me why I was speeding?